Nicholas Piramal India Ltd (NPIL) is attempting to bring down its R&D costs and focus on the core pharma business. Its board recently decided to demerge its new chemical entity (NCE) research unit into a separate company.
NPIL will separate its NCE R&D along with cash of Rs 95 crore and book value of assets of about Rs 90 crore. This demerger is with effect from April 2007, subject to regulatory clearances. NPIL’s R&D expenses as a percentage of net sales was 5.3 per cent in the June 2007 quarter.
NPIL management in its revised guidance for FY08 has highlighted that its R&D operating expenditure will fall from an earlier projected Rs 170 crore to Rs 100 crore.
The management also expects its operating margin to reach 17.7 per cent in FY08 from an earlier projected 15.5 per cent.